Rita

Given what happened to the industry last year with Hurricanes Rita and Katrina, it’s pretty easy to make a bull’s case for the natural gas market. In fact many industry prognosticators expect that once the current gas storage surplus is worked off, an underlying tight supply-demand balance will return, driving prices back into the stratosphere. But Stephen Thumb at consulting firm Energy Ventures Analysis in Arlington, VA, believes many experts are underestimating the impact that LNG will have on the U.S. market.

Given what happened to the industry last year with Hurricanes Rita and Katrina, it’s pretty easy to make a bull’s case for the natural gas market. In fact many industry prognosticators expect that once the current gas storage surplus is worked off, an underlying tight supply-demand balance will return, driving prices back into the stratosphere. But Stephen Thumb at consulting firm Energy Ventures Analysis in Arlington, VA, believes many experts are underestimating the impact that LNG will have on the U.S. market.

The American Gas Association (AGA) and American Public Gas Association (APGA) gave a thumbs-up to FERC’s proposed rule issued in the wake of Hurricanes Katrina and Rita that would beef up the Commission’s pipeline reporting requirements in the event of pipeline damage that disrupts supply. However, Nevada-based Pauite Pipeline said the rule is vague, overly broad and could sharply raise the reporting burden on pipeline companies while inundating the Commission with insignificant information on minor pipeline events.

The American Gas Association (AGA) and American Public Gas Association (APGA) gave a thumbs-up to FERC’s proposed rule issued in the wake of Hurricanes Katrina and Rita that would beef up the Commission’s pipeline reporting requirements in the event of pipeline damage that disrupts supply. However, Nevada-based Pauite Pipeline said the rule is vague, overly broad and could sharply raise the reporting burden on pipeline companies while inundating the Commission with insignificant information on minor pipeline events.

In an update to its hurricane damage assessment, the Minerals Management Service (MMS) sharply increased the number of pipelines listed as damaged by Katrina and Rita last year to 457 from 183 based on additional industry assessments and investigations. It also raised the number of large diameter pipelines (10 inches in diameter or larger) damaged to 101 from 64 but noted that 32 have now returned to service.

El Paso Corp., the gas pipeline company that suffered the most under the wrath of Hurricanes Katrina and Rita last year, is taking a number of new precautions in preparation for what may be another active hurricane season, said Dan Martin, senior vice president of operations for El Paso’s five major regulated pipelines.

In an update Friday of supply availability on its 500 and 800 Lines, Tennessee said current shut-in production as a result of damage from Hurricanes Katrina and Rita totals about 350,000 Dth/d. About 100,000 Dth/d is offline due to pipeline damage and 250,000 Dth/d is shut in due to third-party damage, Tennessee said. See the bulletin board for an itemized list of ongoing recovery projects and Tennessee’s projections for when they will be completed.

After losing more than 30% of its natural gas volumes, or 1.4 Bcf/d of supply on its 500 and 800 pipelines following Hurricanes Katrina and Rita, Tennessee Gas Pipeline (TGPL) has repaired almost all of its main lines in the Gulf of Mexico and made “significant progress” on other pipeline recovery efforts. Based on the timelines for processing plant availability announced by various operators, Tennessee said it expects to have on-system processing capable of handling about 550,000 Dth/d of flow on the 800 line and up to 800,000 Dth/d of flow on the 500 line by the second half of December.

While CF Industries Holdings, Inc. suffered no damage to its Donaldsonville, LA nitrogen fertilizer complex during hurricanes Katrina and Rita, its business will be off in the fourth quarter due to the high cost of feedstock natural gas. And its greatest challenge could come in the spring if farmers decide to cut back on planting because of high fertilizer costs.